KAPONGA DAIRY COMPANY

Taranaki Daily News, 10 September 1934, Page 14

KAPONGA DAIRY COMPANY

PAYMENT OF 10D EXPECTED HIGH QUALITY OF THE PRODUCE. VALUE OF FARM INSTRUCTION. The 36th annual meeting of the Kaponga Dairy Co., Ltd. was held on Friday night, Mr. A. V. Tait, chairman of directors, presiding over an attendance of about 80 chareholders. The report stated on that favourable climatic conditions, and improved methods of farming resulted in an in crease of supply of 7 per cent. Cheese on consignment and unsold at the date of balance, approximately 500 tons, was brought on charge at 4Jd f.0.b., and the butter, about 10 tons, had all been sold at 9 13-16th. basis of finest. On this basis, the declared pay-out to date was 9.81 d, including interest on shares, of which suppliers received 9}d to August 20. The directors recommended a dividend of 4 per cent, on paid up capital, which would absorb £B3O. The final distribution for 1932-33 season was 10.53 d, including interest on shares. Owing to the illness of the secretary, Mr. R. G. Cook, since Easter, the auditor Mr. H. A. Lennon, was appointed actingsecretary. This necessitated the appointment of an auditor during Mr. Lennon’s term of office, and Mr. W. J. Tristram was appointed. Factory statistics with those for the previous season in parentheses were: Pounds milk received, 37,933,970 (34,047,569); butterfat in milk for butter-mak-ing, 66,145 (33,774), for cheese-making, 1,569,957 (1,437,080), totals, 1,636,102 (1,470,854); average test, 4.31 (4.32); pounds whey butter to ton of cheese, 57.0 (56.1); cheese made (grader’s weights), 4,008,377 (3,726,493); cheese made (sales weights), 1789 tons 9cwt. 91b. (1663 ton. 12cwt 291 b); creamery butter, 35 ton 19cwt. 551 b. (18 ton lcwt. 761 b); whey butter, 45 ton 18cwt. 721 b. (41 ton 13cwt. 381 b); total charges per lb. butterfat to f.0.b., 2.55 d (2.65 d In moving the adoption of the report and balance sheet the chairman stated that apart from the financial stringency the results as disclosed by the statements of accounts, were satisfactory. If the market held the payment should easily pass lOd for the whole season. The final pay-out would be made, far as they could tell in November next. All the balance of last season’s make was on the water. REPUTATION FOR QUALITY The reputation for quality which the company had achieved had been more than sustained. Over all factories the grading average was 93.024, while for manufacture the results showed 70.9 finest, 21.03 first and .07 second. The second grade represented only 19 crates out of over 24,000. Such fine results showed the capability of the managers, especially when it was considered that the yield had not suffered “For a company of equal size, and with as many branches as we have, I claim that we easily stand first in the whole Dominion,” Mr. Tait said. ‘‘The performance, indeed, has been so notable that our senior manager, now acting general manager, Mr. E. H. G. Scott, was invited to give evidence te the dairy commission upon his methods of manufacture and his views on the .question of obtaining quality. This speaks for itself and I need not elaborate it. This is a very great compliment and I am sure you will appreciate it.” "Some few years ago all the cry was for yield, but now the whole trend of the thinking men of the dairy industry is for quality. Look after the quality, they say, and the yield will look after itself. I am sure in saying that this company has demonstrated that beyond question, and now that most companies are waking up to that fact we shall have to look to our laurels to maintain our lead. Our output of finest, with its consequent premium, has resulted in putting several hundreds of pounds into the company’s coffers.” In order to serve suppliers as well as possible casein was made in May and a part of June. This product had been brought into account at the amount of the advance and they could look for a further addition to revenue from that source. Mr. Tait expressed regret at the absence because of ill health of the secretary He hoped that he would soon return to duty completely restored to health and strength. VALUE OF SHARES For some time past a mischievous and damaging statement had been spread abroad, Mr. Tait said, that the company’s shares were worth only an absurdly low figure. Opinion from an expert was sought and it was thought it all the more desirable it should come from one who would be free from any local knowledge. The directors sent the last year’s balancesheet to Mr. F. H. Bass, a public accountant of the highest repute at Wellington, who was selected by the Government as one of the committee ■which drafted the recently passed Companies Act. He was asked to give his opinion on the value of the shares on the facts as disclosed by the balance sheet. In his report he expressed himself in absolute agreement with the view the company expressed that no man should attempt to value shares unless he had access to the books and records of the company, and was in possession of a valuation of the assets of the company made by competent people Briefly summarised the only way to value shares on balance sheet figures was to add the reserves to the paid-up capital and the calls unpaid, which no one had the right to assume were not collectible, and divide the total by the amount of capital subscribed. The result was the value of each £1 share. In the company’s case this was £1 9s 2d a share. The reserves were very large and represented 58.391 per cent of the paidup capital at June 30 last year. They had been genuinely built up from the very first year of the company’s existence and if it were not for those reserves the shareholders would not have their factories and plant. Loans accounts had been reduced during the year by £lOOO and had it not been that the earning power of the dairy farmer had been so restricted during the last two years the accounts would have presented a much lower figure. Whatever might be said of the desirability of dairy companies embarking on this class. of business it could be denied that doing so had been a benefit to a number of suppliers. Despite the difficult times the company was enabled to assist SUch as needed it and to supply them with manures where practicable. Those who had the advantage of assistance responded by keeping their demands to the lowest possible margin. The motion was seconded by Mr. W. La vail and carried.

A long review of the company’s position was given by Mr. H. A. Lennon, acting-secretary. For two vacancies on the directorate there were three candidates, the ballot resulting: Messrs J. P. Gibson 380, D. T. Fitzgerald 358, (retiring directors reelected), H. Espiner 179. Mr. H. A. Lennon was re-appointed auditor at increased remuneration.

The chairman’s honorarium and directors’ fees were fixed the same ■ as last year after the directors had declined to accept a suggestion to restore the ten per cent. cut. Mr, R. D. Dagg moved a motion to

restrict block voting but it was not accepted owing to insufficient notice and Mr. Dagg accordingly gave notice to move it at the next annual meeting. Mr. Hey suggested that the services of the farm instructor might be terminated. There was nothing more for him "to do, he commented.

The chairman pointed out the necessity for maintaining the milk supply at its highest standard and considered the loss of the instructor might prove detrimental to this object. If the quality of the milk slipped back it would involve a more serious loss than the cost of the service. Mr. Hey: Put on a higher penalty, then. Mr. D. Gibson: I move we do without the instructor and put a penny penalty on second grade. Chorus: No. No.

Asked to give his opinion, the manager said Kaponga claimed a record in New Zealand for the lowest percentage of second grade milk and farm instruction was mostly responsible for this result. The instructor kept things right and they could not do without farm instruction. The total cost was only a small amount and he appealed for its retention for another 12 months at least. Mr. D. McLeod said there was one man at Riverlea who admitted the instructor had showed him a great deal. Mr. C. D. Field supported this statement and said he owed a great deal to the instructor for advice given. Mr. Espiner said the instructor had put him right and had helped him to overcome second grade milk. Mr. A. Shepherd: We need all three, the laboratory, the instructor and the penalty to keep us up to the mark. Mr. T. Eden endorsed the opinion in favour of farm instruction. The chairman said it was necessary to give the department six months’ notice if it were desired to terminate the services of the instructor. Mr. D. Gibson moved to that effect and Nir Hey seconded, but the motion was lost by 33 to 30 on a second count of hands. Asked if ensilage was detrimental to milk quality Mr. Scott replied that he had not found any trouble with milk due to ensilage. On the motion of the chairman a vote of thanks was accorded the managers and staff, and the Press. The chairman also thanked shareholders for their support in bringing good milk. Mr. Tait was re-elected chairman at a subsequent meeting of directors, and Mr. G. B. Hill was elected deputy chairman.